"Cannot create a file" error when running Start-Website command in Powershell

The error message:

Start-Website : Cannot create a file when that file already exists.

...usually means that you have a bindings conflict where there is already a site running on the same IP address, port and if you're using them, host header.

I'd check your new site bindings in IIS MMC then find out if something else is using exactly the same bindings.